SJ voters to consider marijuana business tax

October 08, 2010

As California voters go to the polls next month to vote on the legalization of recreational marijuana, voters in San Jose will consider a proposed marijuana business tax, which if passed would make San Jose the highest-taxing city in the state for medical marijuana facilities.

Measure U, which requires a majority vote, asks voters in the Nov. 2 election to consider a proposal to impose up to a 10 percent tax on the facilities, with the revenue used to fund city services.

A tax would be placed on the planting, cultivation, harvesting, transporting, manufacturing, compounding, converting, processing, preparing, storing, packaging, and wholesale and retail sales of marijuana in San Jose.

If it passes, the tax would generate millions of dollars in revenue from the city's marijuana facilities, which number somewhere around 40 to 50.

The proposal has drawn crowds of supporters and opponents to City Council meetings this year.

Proponents, among them Councilman Pierluigi Oliverio, who proposed the ordinance, say the revenue collected from the tax would help balance the budget and fund city services like road paving, libraries, police, firefighters, parks and senior programs.

"It's doing what other cities in California are doing to collect revenue. This is the only type of tax that would pass in this environment," Oliverio said. "We tax alcohol, we tax cigarettes...this would fall into the same category."

All revenue collected from the facilities would be required to have financial audits, Oliverio said.

Opponents, however, argue that the tax is too high and exploits the illnesses of medical marijuana patients. Among them is the Silicon Valley chapter of Americans for Safe Access, a national organization that works to ensure safe and legal access to medical cannabis and protect patients' rights.

The organization claims that the cost of any tax beyond 3 percent would be passed on to the patients, the majority of whom already spend several hundred dollars a month on medicine and also pay a state sales tax.

"Many patients won't be able to afford this increase and they will have to turn to the black market where it is legal for them to buy medicine and much cheaper. This tax will reward drug dealers and punish law-abiding citizens," a statement on the Americans for Safe Access website said.